Tell me how this works 
lib/auth/punbb.php
<?PHP
///////////////////////////////////////////////////////////////
//
// X7 Chat Version 2.0.4
// Released June 16, 2006
// Copyright (c) 2004-2006 By the X7 Group
// Website: http://www.x7chat.com
//
// This program is free software. You may
// modify and/or redistribute it under the
// terms of the included license as written
// and published by the X7 Group.
//
// By using this software you agree to the
// terms and conditions set forth in the
// enclosed file "license.txt". If you did
// not recieve the file "license.txt" please
// visit our website and obtain an official
// copy of X7 Chat.
//
// Removing this copyright and/or any other
// X7 Group or X7 Chat copyright from any
// of the files included in this distribution
// is forbidden and doing so will terminate
// your right to use this software.
//
////////////////////////////////////////////////////////////////EOH
// PunBB 1.2
// This file holds data on authentication
$auth_ucookie = "X7C2U";
$auth_pcookie = "X7C2P";
$auth_register_link = "../register.php";
$auth_disable_guest = true;
// Get the PunBB Configuration File
require ("../config.php");
// Make a database connection to the PunBB database
$pun_db = new x7chat_db($db_host,$db_username,$db_password,$db_name);
// Authenticate the user against the PunBB database
if (isset($_COOKIE[$cookie_name]))
list($cookie['user_id'], $cookie['password_hash']) = @unserialize($_COOKIE[$cookie_name]);
if ($cookie['user_id'] > 1)
{
// Check if there's a user with the user ID and password hash from the cookie
$result = $pun_db->DoQuery('SELECT u.id, u.username, u.password FROM '.$db_prefix.'users AS u WHERE u.id='.intval($cookie['user_id']));
$pun_user = $pun_db->Do_Fetch_Row($result);
if (isset($pun_user[0]) && md5($cookie_seed.$pun_user[2]) === $cookie['password_hash'])
{
@setcookie($auth_ucookie, $pun_user[1], time()+$x7c->settings['cookie_time'], $X7CHAT_CONFIG['COOKIE_PATH']);
@setcookie($auth_pcookie, $cookie['password_hash'], time()+$x7c->settings['cookie_time'], $X7CHAT_CONFIG['COOKIE_PATH']);
$_COOKIE[$auth_ucookie] = $pun_user[1];
$_COOKIE[$auth_pcookie] = $cookie['password_hash'];
}
}
function auth_encrypt($data)
{
if (function_exists('sha1')) // Only in PHP 4.3.0+
return sha1($data);
else if (function_exists('mhash')) // Only if Mhash library is loaded
return bin2hex(mhash(MHASH_SHA1, $data));
else
return md5($data);
}
function auth_getpass($auth_ucookie)
{
global $pun_db, $db_prefix, $prefix, $txt, $g_default_settings, $x7c, $db;
$query = $pun_db->DoQuery("SELECT password FROM {$db_prefix}users WHERE username='$_COOKIE[$auth_ucookie]'");
$password = $pun_db->Do_Fetch_Row($query);
// Check if they have an X7 Chat account
if($password[0] != ""){
$query = $db->DoQuery("SELECT * FROM {$prefix}users WHERE username='$_COOKIE[$auth_ucookie]'");
$row = $db->Do_Fetch_Row($query);
if($row[0] == ""){
// Create an X7 Chat account for them.
$time = time();
$ip = $_SERVER['REMOTE_ADDR'];
$db->DoQuery("INSERT INTO {$prefix}users (id,username,password,status,user_group,time,settings,hideemail,ip) VALUES('0','$_COOKIE[$auth_ucookie]','$password[0]','$txt[150]','{$x7c->settings['usergroup_default']}','$time','{$g_default_settings}','0','$ip')");
}
}
return $password[0];
}
function change_pass($user,$newpass)
{
global $db_prefix, $pun_db;
$newpass = auth_encrypt($newpass);
$query = $pun_db->DoQuery("UPDATE {$db_prefix}users SET password='$newpass' WHERE username='$user'");
}
And in install.php
FIND
}elseif(eregi("http://phpnuke.org",$data)){
include("../config.php");
$def['db_name'] = $dbname;
$def['db_user'] = $dbuname;
$def['db_pass'] = $dbpass;
$def['db_host'] = $dbhost;
$def['type'] = "phpnuke";
$integrated = true;
}
AFTER, ADD
elseif(eregi("define('PUN', 1);",$data)){
include("../config.php");
$def['db_name'] = $db_name;
$def['db_user'] = $db_username;
$def['db_pass'] = $db_password;
$def['db_host'] = $db_host;
$def['type'] = "punbb";
$integrated = true;
}